Deposit Insurance in Africa: A Veritable Mechanism for Depositor Protection
Authors Panshak Ephraim Haggai
Affiliations: Legal Officer, Nigerio Deposit Insurance Corporation (NDIC)
Source: Journal of Comparative Law in Africa, Volume 2 Issue 1, p. 101 – 110
The history of the establishment of the first deposit insurance system dates as far back as 1933 in the United States of America. Since then, the system has been recognised as an invaluable component of an efficient financial safety net in the economy of nations that have a stable financial system, and has been adopted and domesticated by many countries across the world. Despite the apparent benefits of a deposit insurance system, its penetration on the African continent has been low. This article seeks to examine the deposit insurance system and highlight its benefits to the financial systems that have adopted it on the African continent. Some of the reasons for the low penetration of this insurance system in Africa are examined and recommendations on how that situation could be reversed in the long run are proffered.